The Bangemann Report.

Recommendations to the European Council
Europe and the global information society 

Members of the High-Level Group 
on the Information Society

Martin Bangemann
Enrico Cabral da Fonseca
Peter Davis
Carlo de Benedetti
Pehr Gyllenhammar
Lothar Hunsel
Pierre Lescure
Pascual Maragall
Gaston Thorn
Candido Velazquez-Gastelu
Peter Bonfield
Etienne Davignon
Jean-Marie Descarpentries
Brian Ennis
Hans-Olaf Henkel
Anders Knutsen
Constantin Makropoulos
Romano Prodi
Jan Timmer
Heinrich von Pierer

Europe and the global information society 

Recommendations to the European Council

In its Brussels meeting of December 1993, the European Council
requested that a report be prepared for its meeting on 24 - 25 June
1994 in Corfu by a group of prominent persons on the specific measures
to be taken into consideration by the Community and the Member States
for the infrastructures in the sphere of information.
On the basis of this report, the Council will adopt an operational
programme defining precise procedures for action and the 
necessary means.

Brussels, 26 May 1994

Contents

Chapter I:  The information society - new ways of living and  working
            together

A revolutionary challenge to decision makers
Partnership for jobs
If we seize the opportunity 
A common creation or a still fragmented Europe ?
What we can expect for ...
The social challenge
Time to press on
An Action Plan
New markets in Europe's information society

Chapter II : A market-driven revolution

A break with the past
Ending monopoly
Enabling the market
Towards a positive outcome

Chapter III : Completing the agenda

Protection of intellectual property rights (IPR)
Privacy
Electronic protection (encryption), legal protection and security 
Media ownership
The role of competition policy
Technology

Chapter IV : The building blocks of the information society

The opportunity for the Union - strengthening its existing networks 
and accelerating the creation of new ones

New basic services are needed
Blazing the trail - ten applications to launch the information society

Chapter V : Financing the information society  a task for the private
sector

Chapter VI : Follow-up

An Action Plan - summary of recommendations

This Report urges the European Union to put its faith in market
mechanisms as the motive power to carry us into the Information Age. 


This means that actions must be taken at the European level and by
Member States to strike down entrenched positions which put Europe at
a competitive disadvantage:

- it means fostering an entrepreneurial mentality to enable the
emergence of new dynamic sectors of the economy

- it means developing a common regulatory approach to bring forth a
competitive, Europe-wide, market for information services

- it does NOT mean more public money, financial assistance, subsidies,
dirigisme, or protectionism.

In addition to its specific recommendations, the Group proposes an
Action Plan of concrete initiatives based on a partnership between the
private and public sectors to carry Europe forward into the
information society.


Chapter 1

The information society -
new ways of living and working together

A revolutionary challenge to decision makers

  Throughout the world, information and communications technologies
are generating a new industrial revolution already as significant and
far-reaching as those of the past.
  
  It is a revolution based on information, itself the expression of
human knowledge. Technological progress now enables us to process,
store, retrieve and communicate information in whatever form it may
take - oral, written or visual -  unconstrained by distance, time and
volume. 
  
  This revolution adds huge new capacities to human intelligence and
constitutes a resource which changes the way we work together and the
way we live together.

This revolution adds huge new capacities to human intelligence and
changes the way we work together and the way we live together.

  Europe is already participating in this revolution, but with an
approach which is still too fragmentary and which could reduce
expected benefits.  An information society is a means to achieve so
many of the Union's objectives.  We have to get it right, and get it
right now.  

Partnership for jobs

  Europe's ability to participate, to adapt and to exploit the new
technologies and the opportunities they create, will require
partnership between individuals, employers, unions and governments
dedicated to managing change. If we manage the changes before us with
determination and understanding of the social implications, we shall
all gain in the long run.
  
  Our work has been sustained by the conviction expressed in the
Commission's White Paper, Growth, Competitiveness and Employment, that
`...the enormous potential for new services relating to production,
consumption, culture and leisure activities will create large numbers
of new jobs...'.  Yet nothing will happen automatically. We have to
act to ensure that these jobs are created here, and soon.  And that
means public and private sectors acting together.  

If we seize the opportunity

-  All revolutions generate uncertainty, discontinuity - and
opportunity. Today_s is no exception.  How we respond, how we turn
current opportunities into real benefits, will depend on how quickly
we can enter the European information society.
  
-  In the face of quite remarkable technological developments and
economic opportunities, all the leading global industrial players are
reassessing their strategies and their options.  

A common creation or a still fragmented Europe? 
  
  The first countries to enter the information society will reap the
greatest rewards. They will set the agenda for all who must follow. By
contrast, countries which temporise, or favour half-hearted solutions,
could, in less than a decade, face disastrous declines in investment
and a squeeze on jobs. 
  
  Given its history, we can be sure that Europe will take the
opportunity.  It will create the information society.  The only
question is whether this will be a strategic creation for the whole
Union, or a more fragmented and much less effective amalgam of
individual initiatives by Member States, with repercussions on every
policy area, from the single market to cohesion.

The only question is whether this will be a strategic creation for the
whole Union, or a more fragmented and much less effective amalgam of
individual initiatives by Member States.

What we can expect for...
  
     Europe's citizens and consumers:
     A more caring European society with a significantly higher
     quality of life and a wider choice of services and entertainment.
     
       the content creators:
     New ways to exercise their creativity as the information society
     calls into being new products and services.
     
     Europe's regions:
     New opportunities to express their cultural traditions and
     identities and, for those standing on the geographical periphery
     of the Union, a minimising of distance and remoteness.
     
     Governments and administrations:
     More efficient, transparent and responsive public services,
     closer to the citizen and at lower cost.  
     
     European business and small and medium sized enterprises:
     More effective management and organisation, access to training
     and other services, data links with customers and suppliers
     generating greater competitiveness.
     
     Europe's telecommunications operators:
     The capacity to supply an ever wider range of new high value-
     added services.
     
     The equipment and software suppliers; the
     computer and consumer electronics industries: 
     New and strongly-growing markets for their products at home and
     abroad.

The social challenge
 
  The widespread availability of new information tools and services
will present fresh opportunities to build a more equal and balanced
society and to foster individual accomplishment. The information
society has the potential to improve the quality of life of Europe's
citizens, the efficiency of our social and economic organisation and
to reinforce cohesion.

The information society has the potential to improve the quality of
life of Europe's citizens, the efficiency of our social and economic
organisation and to reinforce cohesion.
  
The information revolution prompts profound changes in the way we
view our societies and also in their organisation and structure.  This
presents us with a major challenge: either we grasp the opportunities
before us and master the risks, or we bow to them, together with all
the uncertainties this may entail.
  
  The main risk lies in the creation of a two-tier society of have and
have-nots, in which only a part of the population has access to the
new technology, is comfortable using it and can fully enjoy its
benefits. There is a danger that individuals will reject the new
information culture and its instruments. 
 
 Such a risk is inherent in the process of structural change. We must
confront it by convincing people that the new technologies hold out
the prospect of a major step forward towards a European society less
subject to such constraints as rigidity, inertia and
compartmentalisation. By pooling resources that have traditionally
been separate, and indeed distant, the information infrastructure
unleashes unlimited potential for acquiring knowledge, innovation and
creativity.
  
Mastering risks, maximising benefits

  Thus, we have to find ways to master the risks and maximise the
benefits. This places responsibilities on public authorities to
establish safeguards and to ensure the cohesion of the new society.
Fair access to the infrastructure will have to be guaranteed to all,
as will provision of universal service, the definition of which must
evolve in line with the technology.

 A great deal of effort must be put into securing widespread public
acceptance and actual use of the new technology. Preparing Europeans
for the advent of the information society is a priority task.
Education, training and promotion will necessarily play a central
role. The White Paper's goal of giving European citizens the right to
life-long education and training here finds its full justification. In
order best to raise awareness, regional and local initiatives -
whether public or private - should be encouraged.

Preparing Europeans for the advent of the information society is a
priority task. Education, training and promotion will necessarily play
a central role.
  The arrival of the information society comes in tandem with changes
in labour legislation and the rise of new professions and skills.
Continuous dialogue between the social partners will be extremely
important if we are to anticipate and to manage the imminent
transformation of the work place. This concerted effort should reflect
new relationships at the work place induced by the changing
environment.
  
  More detailed consideration of these issues exceeds the scope of
this Report. The Group wishes to stress that Europe is bound to
change, and that it is in our interest to seize this opportunity. The
information infrastructure can prove an extraordinary instrument for
serving the people of Europe and improving our society by fully
reflecting the original and often unique values which underpin and
give meaning to our lives.  
  
  At the end of the day, the added value brought by the new tools, and
the overall success of the information society, will depend on the
input made by our people, both individually and in working together.
We are convinced that Europeans will meet this challenge.
  
Time to press on
  
  Why the urgency?  Because competitive suppliers of networks and
services from outside Europe are increasingly active in our markets.
They are convinced, as we must be, that if Europe arrives late our
suppliers of  technologies and services will lack the commercial
muscle to win a share of the enormous global opportunities which lie
ahead. Our companies will migrate to more attractive locations to do
business. Our export markets will evaporate. We have to prove them
wrong.
  
  Tide waits for no man, and this is a revolutionary tide, sweeping
through economic and social life.  We must press on.  At least we do
not have the usual European worry about catching up.  In some areas we
are well placed, in others we do need to do more - but this is also
true for the rest of the world's trading nations.  
  
  The importance of the sector was evident by its prominence during
the Uruguay Round of GATT negotiations. This importance is destined to
increase.
  
  We should not be sceptical of our possibilities for success.  We
have major technological, entrepreneurial and creative capabilities.
However,  the diffusion of information is still too restricted and too
expensive.  This can be tackled quickly through regulatory reforms. 
  
  Public awareness of the technologies has hitherto been too limited.
This must change.  Political attention is too intermittent.  The
private sector expects a new signal.

Political attention is too intermittent.  The private sector expects
a new signal.

An Action Plan 
  
  This Report outlines our vision of the information society and the
benefits it will deliver to our citizens and to economic operators. It
points to areas in which action is needed now so we can start out on
the market-led passage to the new age, as well as to the agents which
can drive us there.
  
  As requested in the Council's mandate, we advocate an Action Plan
based on specific initiatives involving partnerships linking public
and private sectors. Their objective is to stimulate markets so that
they can rapidly attain critical mass.  
  
  In this sector, private investment will be the driving force. 
Monopolistic, anticompetitive environments are the real roadblocks to
such involvement. The situation here is completely different from that
of other infrastructural investments where public funds are still
crucial, such as transport.
  
  This sector is in rapid evolution. The market will drive, it will
decide winners and losers.  Given the power and pervasiveness of the
technology, this market is global.  

The market will drive ... the prime task of government is to safeguard
competitive forces....
  
  The prime task of government is to safeguard competitive forces and
ensure a strong and lasting political welcome for the information
society, so that demand-pull can finance growth, here as elsewhere.  
  
  By sharing our vision, and appreciating its urgency, Europe_s
decision-makers can make the prospects for our renewed economic and
social development infinitely brighter.
  
New markets in Europe's information society
  
  Information has a multiplier effect which will energise every
economic sector. With market driven tariffs, there will be a vast
array of novel information services and applications:
  
from high cost services, whose premium prices are justified by the
value of benefits delivered, to budget price products designed for
mass consumption;

 from services to the business community, which can be tailored to the
needs of a specific customer, to standardised packages which will sell
in high volumes at low prices;
  
  from services and applications which employ existing infrastructure,
peripherals and equipment (telephone and cable TV networks,
broadcasting systems, personal computers, CD players and ordinary TV
sets) to those which will be carried via new technologies, such as
integrated broadband, as these are installed.

        Markets for business 
  
  Large and small companies and professional users are already leading
the way in exploiting the new technologies to raise the efficiency of
their management and production systems. And more radical changes to
business organisation and methods are on the way.
  
  Business awareness of these trends and opportunities is still lower
in Europe compared to the US. Companies are not yet fully exploiting
the potential for internal reorganisation and for adapting
relationships with suppliers, contractors and customers.  We have a
lot of pent up demand to fill.

Business awareness of these trends and opportunities is still lower in
Europe compared to the US. 
  
  In the business markets, teleconferencing is one good example of a
business application worth promoting, while much effort is also being
dedicated worldwide to the perfection of telecommerce and electronic
document interchange (EDI). 
 
  Both offer such cost and time advantages over traditional methods
that, once applied,  electronic procedures rapidly become the
preferred way of doing business.  According to some estimates,
handling an electronic requisition is one tenth the cost of handling
its paper equivalent, while an electronic mail (e-mail) message is
faster, more reliable and can save 95% of the cost of a fax.
  
  Electronic payments systems are already ushering in the cashless
society in some parts of Europe. We have a sizeable lead over the rest
of the world in smart card technology and applications. This is an
area of global market potential.

 Markets for small and medium sized enterprises 
  
  Though Europe's 12 million SMEs are rightly regarded as the backbone
of the European economy, they do need to manage both information and
managerial resources better. 
  
  They need to be linked to easy access, cost-effective networks
providing information on production and market openings. The
competitiveness of the whole industrial fabric would be sharpened if
their relationships with large companies were based on the new
technologies.
  
  Networked relationships with universities, research institutes and
laboratories would boost their prospects even more by helping to
remedy chronic R&D deficiencies.  Networking will also diminish the
isolation of SMEs in Europe's less advantaged regions, helping them to
upgrade their products and find wider markets.

      Markets for consumers
  
  These are expected to be richly populated with services, from home
banking and teleshopping to a near-limitless choice of entertainment
on demand.  
 
  In Europe, like the United States, mass consumer markets may emerge
as one of the principal driving forces for the information society.
American experience already shows that the development markets
encounters a number of obstacles and uncertainties.
 
  Given the initial high cost of new pay-per-view entertainment
services, and of the related equipment, as well as the high cost of
bringing fibre optics to the home, a large mass consumer market will
develop more easily if entertainment services are part of a broader
package. This could also include information data, cultural
programming, sporting events, as well as telemarketing and
teleshopping. Pay-per-view for on-line services, as well as
advertising, will both be necessary as a source of revenue. To some
extent, existing satellite and telephone infrastructure can help to
serve the consumer market in the initial phase.
  
  At the moment, this market is still only embryonic in Europe and is
likely to take longer to grow than in the United States.  There, more
than 60% of households are tapped by cable TV systems which could also
carry text and data services.  In Europe, only 25% are similarly
equipped, and this figure masks great differences between countries,
e.g. Belgium (92%) and Greece (1-2%).  
  
  Another statistic: in the United States there are 34 PCs per hundred
citizens.  The European figure overall is 10 per hundred, though the
UK, for instance, at 22 per hundred, is closer to the US level of
computer penetration.  
  Lack of available information services and poor computer awareness
could therefore prove handicaps in Europe. Telecommunication networks
are, however, comparable in size and cover, but lag behind in terms of
utilisation. These networks, therefore, can act as the basic port of
access for the initial services, but stimulation of user applications
is still going to be necessary. 
  
  Such structural weaknesses need not halt progress. Europe's
technological success with CD-ROM and CD-I could be the basis for a
raft of non-networked applications and services during the early
formative years of the information society. These services on disk
have considerable export potential if Europe's audio-visual industry
succeeds in countering current US dominance in titles.
  
  In terms of the market, France's Minitel network already offers an
encouraging example that European consumers are prepared to buy
information and transaction services on screen, if the access price is
right. It reaches nearly 30 million private and business subscribers
through six million small terminals and carries about 15,000 different
services. Minitel has created many new jobs, directly and indirectly,
through boosting business efficiency and competitiveness. 
  
  In the UK, the success of the Community-sponsored Homestead
programme, using CD-I, is indicative, as is the highly successful
launch of (an American) dedicated cable teleshopping channel.  
  
  Meanwhile in the US, where the consumer market is more advanced,
video-on-demand and home shopping could emerge as the most popular
services.
  
Audio-visual markets
  
  Our biggest structural problem is the financial and organisational
weakness of the European programme industry. Despite the enormous
richness of the European heritage, and the potential of our creators,
most of the programmes and most of the stocks of acquired rights are
not in European hands. A fast growing European home market can provide
European industry with an opportunity to develop a home base and to
exploit increased possibilities for exports.
  
  Linguistic fragmentation of the market has long been seen as a
disadvantage for Europe's entertainment and audio-visual industry,
especially with English having an overwhelming dominance in the global
market - a  reflection of the US lead in production and, importantly,
in distribution. This lead, which starts with cinema and continues
with television, is likely to be extended to the new audio-visual
areas. However, once products can be easily accessible to consumers,
there will be more opportunities for expression of the multiplicity of
cultures and languages in which Europe abounds.

...once products can be easily accessible to consumers, there will be
more opportunities for expression of the multiplicity of cultures and
languages in which Europe abounds.
  
  Europe's audio-visual industry is also burdened with regulations.
Some of these will soon be rendered obsolete by the development of new
technologies, hampering the development of a dynamic European market. 
  
  As a first step to stimulating debate on the new challenges, the
Commission has produced a Green Paper on the audio-visual industry.


Chapter 2

A market-driven revolution

A break with the past
  
  The Group is convinced that technological progress and the evolution
of the market mean that Europe must make a break from policies based
on principles which belong to a time before the advent of the
information revolution.
  
  The key issue for the emergence of new markets is the need for a new
regulatory environment allowing full competition.  This will be a
prerequisite for mobilising the private capital necessary for
innovation, growth and development.
  
  In order to function properly, the new market requires that all
actors are equipped to participate successfully, or at least that they
do not start with significant handicaps. All should be able to operate
according to clear rules, within a single, fair and competitive
framework.
  
The Group recommends Member States to accelerate the ongoing process
of liberalisation of the telecom sector by:

- opening up to competition infrastructures and services still in the
 monopoly area

- removing non-commercial political burdens and budgetary constraints 
imposed on telecommunications operators 

- setting clear timetables and dead lines for the implementation of 
practical measures to achieve these goals

Ending monopoly
  
  This is as true for the telecommunications operators (TOs) as for
others. It is now generally recognised as both necessary and desirable
that the political burdens on them should be removed, their tariffs
adjusted and a proper regulatory framework created.  Even the
operations of those TOs whose status has already evolved over recent
years are not fully in line.
  
  It is possible to end monopoly. In future, all licensed public
operators should assume their share of public service responsibilities
(e.g. universal service obligation and the provision of equal access
to networks and services).
  
  A competitive environment requires the following:
  
      TOs relieved of political constraints, such as:
  
  - subsidising public functions;
  - external R&D activities;
  - contributions to land planning and management objectives;
  - the burden to carry alone the responsibility of universal service;
  
      a proper regulatory framework de signed to achieve:
     
  - market regulation to enable and to protect competition;
  - a predictable environment to make possible strategic planning  
    and investment;
     
     adjustment of tariffs.
  
Enabling the market

The Group recommends the establishment at the European level of an
authority whose terms of reference will require a prompt attention.
  
  In order for the market to operate successfully, the Group has
identified the following objectives and recommendations:
  
 Evolution in the regulatory domain
  
  Identify and establish the minimum of regulation needed, at the
European level, to ensure the rapid emergence of efficient European
information infrastructures and services.  The terms of reference of
the authority which will be responsible for the enforcement of this
regulation is a question that will require a prompt attention.
  
  The urgency of the matter is in direct relation to the prevailing
market conditions.  A clear requirement exists for the new `rules of
the game' to be outlined as soon as possible.  The market place will
then be in a position to anticipate the forthcoming framework, and the
opportunity will exist for those wishing to move rapidly to benefit
from these efforts.
 
  The authority will need to address:
  
- the regulation of those operations which, because of their
Community-wide nature, need to be addressed at the European level,
such as licensing, network interconnection when and where necessary,
management of shared  scarce resources (e.g. radio-frequency
allocation, subscriber numbering and advice to Member States
regulatory authorities on general issues.

- a single regulatory framework valid for all operators, which would
imply lifting unequal conditions for market access.  It would also
ensure that  conditions for network access and service use be guided
by the principles of  transparency and non-discrimination,
complemented by practical rules for  dispute resolution and speedy
remedy against abuse dominance.
  
     Interconnection and interoperability
  
     Two features are essential to the deployment of the information
infrastructure needed by the information society: one is a seamless
interconnection of networks and the other that the services and
applications which build on them should be able to work together
(interoperability).
  
    In the past the political will to interconnect national telephone
networks resulted in hundreds of millions of subscriber connections
world-wide. Similar political determination and corresponding effort
are required to set up the considerably more complex information
infrastructures.

Interconnection of networks and interoperability of services and
applications are recommended as primary 
Union objectives.

  The challenge is to provide interconnections for a variety of
networking conditions (e.g. fixed and new type of networks, such as
mobile and  satellite) and basic services (e.g. Integrated Service
Digital Network - ISDN).  Currently, the positions of monopoly
operators are  being eroded in these fast-developing areas.
  
  Joint commercial decisions must be taken by the TOs without delay to
ensure rapid extension of European basic services beyond telephony. 
This would improve their competitive position vis-a-vis non-European
players in their own markets.
  
  The European information society is emerging from many different
angles. European infrastructure is evolving into an ever tighter web
of networks, generic services, applications and equipment, the
development, distribution and maintenance of which occupy a multitude
of sources worldwide.
  
  In an efficient and expanding information infrastructure, such
components should work together.
  
  Assembling the various pieces of this complex system to meet the
challenge of interoperability would be impossible without clear
conventions. Standards are such conventions.
  
  Open systems standards will play an essential role in building a
European information infrastructure.
  
  Standards institutes have an honourable record in producing European
standards, but the standardisation process as it stands today raises
a number of concerns about fitness for purpose, lack of
interoperability, and  priority setting that is not sufficiently
market driven.
  
  Action is required at three different levels:
  
     - at the level of operators, public procurement and investors:

  following the successful example of GSM digital mobile telephony,
market players (industry, TOs, users) could establish Memoranda of
Understanding (MoU) to set the specifications requirements for
specific application objectives.  These requirements would then
provide input to the competent standardisation body.  This type of
mechanism would adequately respond to market needs.
  
  Operators, public procurement and investors should adopt unified
open standard-based solutions for the provision and the procurement of
information services in order to achieve global interoperability.
  
     - at the level of  the European standards bodies:

  These should be encouraged to establish priorities based on market
requirements and to identify publicly available specifications,
originated by the market, which are suitable for rapid transformation
into standards (e.g. through fast track procedures).
  
     - at the level of the Union:

  European standardisation policy should be reviewed in the light of
the above. When the market is not providing acceptable technical
solutions to achieve one of the European Union's objectives, a
mechanism should be sought to select or generate suitable
technologies.
  
  World-wide interoperability should be promoted and secured.

The Group recommends a review of the European standardisation process
in order to increase its speed and responsiveness to markets.

      Urgent action to adjust tariffs 

Reduction in international, long distance and leased line tariffs will
trigger expansion in the usage of infrastructures, generating
additional revenues, and simultaneously giving a major boost to
generic services and innovative applications
  
  Reduction in international, long distance and leased line tariffs
will trigger expansion in the usage of infrastructures, generating
additional revenues, and simultaneously giving a major boost to
generic services and innovative applications
  
  In most cases, the current unsatisfactory tariff situation results
from the TOs monopoly status and a variety of associated political
constraints.

  The introduction of competitive provision of services and
infrastructures implies that TOs would be able to adjust their tariffs
in line with market conditions.  Rebalancing of international and
long-distance versus local tariffs is a critical step in this process.
  
The Group recommends as a matter of urgency the adjustment of
international, long distance and leased line tariffs to bring these
down into line with rates practised in other advanced industrialised
regions.
Adjustment of tariffs should be accompanied by the fair sharing of
public service obligations among operators.
  
  Two elements should accompany the process:
  
  -  TOs freed from politically imposed budgetary constraints;
  -  a fair and equitable sharing of the burden of providing universal
  services between all licensed operators.
    
     Fostering critical mass
  
  Market segments based on the new information infrastructures cannot
provide an adequate return on investment without a certain level of
demand.  In most cases, competition alone will not provide such a
mass, or it will provide it too slowly.
  
  A number of measures should be taken in order to reach this goal:
  
  - co-operation should be encouraged  among competitors so as to
  create the required size and momentum in particular market areas.
  The already mentioned GSM MoU is an archetypal example of how
  positive this approach can be.
  - agreement between public administrations to achieve common
  requirements and  specifications, and a commitment to use these in
  procurement at national and European levels.
   - extensive promotion and use of existing and forthcoming European
  networks and services.
   - awareness campaigns, notably directed at public administrations,
  SMEs and educational institutions.

It is recommended to promote public awareness. Particular attention
should be paid to the small and medium sized business sector, public
administrations and the younger generation.

  In addition, everyone involved in building up the information
society must be in a position to adapt strategies and forge alliances
to enable them to contribute to, and benefit from, overall growth in
the field.
     
      Secure the world-wide dimension

The Group recommends that the openness of the European market should
find its counterpart in markets and networks of other regions of the
world.  
It is of paramount importance for Europe that adequate steps are taken
to guarantee equal access.
  
  Since information infrastructures are borderless in an open market
environment, the information society has an essentially global
dimension.
  
  The actions advocated in this Report will lead to a truly open
environment, where access is provided to all players.  This openness
should find its counterpart in markets and networks of other regions
of the world.  It is obviously of paramount importance for Europe that
adequate steps are taken to guarantee equal access.


Towards a positive outcome

  The responses outlined above to the challenges posed by the
deployment of the information society will be positive for all
involved in its creation and use.
  
  Telecommunications, cable and satellite operators will be in a
position to take full advantage of market opportunities as they see
fit, and to expand their market share.  
  
  The service provider and content industries will be able to offer
innovative products at attractive prices.  
  
  Citizens and users will benefit from a broader range of competing
services.  
  
  Telecommunication equipment and software suppliers will see an
expanding market.
  
  Those countries that have already opted for faster liberalisation,
are experiencing rapidly expanding domestic markets that provide new
opportunities for TOs, service providers and industry. For the others,
the price to pay for a slower pace of liberalisation will be a stiffer
challenge from more dynamic foreign competitors and a smaller domestic
market. Time is running out. If action is not accelerated, many
benefits will arrive late, or never.
  
  It is an essential recommendation of the Group that governments
support accelerated liberalisation by drawing up clear timetables and
deadlines with practical measures to obtain this goal.
  
  In this context, the 1993 Council Resolution remains a useful point
of reference. Even before the specified dates,  governments should
take best advantage of its built in flexibility to seize the
opportunities offered by a burgeoning competitive market. They should
speed up the opening to competition of infrastructures and of those
services that are still in the monopoly area, as well as remove
political burdens imposed on their national TOs.
  
In this context, the 1993 Council Resolution remains a useful point of
reference. Even before the specified dates,  governments should take
best advantage of its built-in flexibility to seize the opportunities
offered by a burgeoning competitive market. They should speed up the
opening to competition of infrastructures and of those services that
are still in the monopoly area, as well as remove political burdens
imposed on their national TOs.

Chapter 3

Completing the agenda
  
  Several policy issues have to be faced in parallel with actions
needed to create an open, competitive and market-driven information
society. Disparate national regulatory reactions carry  a very real
threat of fragmentation to the internal market.
  
  Here there are two different sets of issues and problems: one
relating to the business community, the other more to individuals and
the information society, with specific reference to privacy.  
  
  As we move into the information society, a regulatory response in
key areas like intellectual property, privacy and media ownership is
required at the European level in order to maximise the benefits of
the single market for all players.  Only the scale of the internal
market is sufficient to justify and attract the required financing of
high performance trans-European information networks. 
  
  Therefore, applying single market principle of freedom of movement
of all goods and services, to the benefit of Europeans everywhere,
must be our key objective.  

The information society is global.
The Group thus recommends that Union action should aim to establish a
common and agreed regulatory framework for the protection of
intellectual property rights, privacy and security of information, in
Europe and, where appropriate internationally.

Protection of intellectual property rights (IPR)
  
  While there is a great deal of information that is in the public
domain, there is also information containing added value which is
proprietary and needs protection via the  enforcement of intellectual
property rights. IPRs are an important factor in developing a
competitive European industry, both in the area of information
technology and more generally across a wide variety of industrial and
cultural sectors.
  
  Creativity and innovation are two of the Union_s most important
assets. Their protection must continue to be a high priority, on the
basis of balanced solutions  which do not impede the operation of
market forces.
  
  The global nature of the services that will be provided through the
information networks means that the Union will have to be party to
international action to protect intellectual property.  Otherwise,
serious difficulties will arise if regulatory systems in different
areas of the world are operating on incompatible principles which
permit circumvention or create jurisdictional uncertainties.
  
The Group believes that intellectual property protection must rise to
the new challenges of globalisation and multimedia and must continue
to have a high priority at both European and international levels.

  In this global information market place, common rules must be agreed
and enforced by everyone.  Europe has a vested interest in ensuring
that protection of IPRs receives full attention and that a high level
of protection is maintained.  Moreover, as the technology advances,
regular world-wide consultation with all interested parties, both the
suppliers and the user communities, will be required.
  
  Initiatives already under way within Europe, such as the proposed
Directive on the legal protection of electronic databases, should be
completed as a matter of priority.
  
  Meanwhile, in order to stimulate the development of new multimedia
products and services, existing legal regimes - both national and
Union - will have to be re-examined to see whether they are
appropriate to the new information society. Where necessary,
adjustments will have to be made.
  
  In particular, the ease with which digitised information can be
transmitted, manipulated and adapted requires solutions protecting the
content providers. But, at the same time, flexibility and efficiency
in obtaining authorisation for the exploitation of works will be a
prerequisite for a dynamic European multimedia industry.
  
Privacy
  
  The demand for the protection of privacy will rightly increase as
the potential of the new technologies to secure (even across national
frontiers) and to manipulate detailed information on individuals from
data, voice and image sources is realised. Without the legal security
of a Union-wide approach, lack of consumer confidence will certainly
undermine rapid development of the information society.
  

  Europe leads the world in the protection of the fundamental rights
of the individual with regard to personal data processing. The
application of new technologies potentially affects highly sensitive
areas such as those dealing with the images of individuals, their
communication, their movements and their behaviour. With this in mind,
it is quite possible that most Member States will react to these
developments by adopting protection, including trans-frontier control
of new technologies and services.
  
  Disparities in the level of protection of such privacy rules create
the risk that national authorities might restrict free circulation of
a wide range of new services between Member States in order to protect
personal data.

The Group believes that without the legal security of a Union-wide
approach, lack of consumer confidence will certainly undermine the
rapid development of the information society. Given the importance
andsensitivity of the privacy issue, a fast decision from Member
States is required on the Commission_s proposed Directive setting out
general principles of data protection.

Electronic protection 
(encryption), legal protection and security
  
  Encryption is going to become increasingly important in assuring the
development of the pay services. Encryption will ensure that only
those who pay will receive the service. It will also provide
protection against personal data falling into the public domain.
  
  International harmonisation would assist the market if it were to
lead to a standard system of scrambling. Conditional access should
ensure fair and open competition in the interests of consumers and
service providers.
  
  Encryption is particularly important for telecommerce, which
requires absolute guarantees in areas such as the integrity of
signatures and text, irrevocable time and date stamping and
international legal recognition.
  
  However, the increased use of encryption and the development of a
single encryption system will increase the returns from hacking into
the system to avoid payment or privacy restrictions. Without a legal
framework that would secure service providers against piracy of their
encryption system, there is the risk that they will not get involved
in the development of these new services.
  
The Group recommends acceleration of work at European level on
electronic and legal protection as well as security.

  On the other hand, governments may need powers to override
encryption for the purposes of fighting against crime and protecting
national security.
  
  An answer given at a national level to this and to the hacking issue
will inevitably prove to be insufficient because communications reach
beyond national frontiers  and because the principles of the internal
market prohibit measures such as import bans on decoding equipment.
  
  Therefore, a solution at the European level is needed which provides
a global answer to the problem of protection of encrypted signals and
security. Based on the principles of the internal market it would
create parity of conditions for the protection of encrypted services
as well as the legal framework for the development of these new
services.

Media ownership
  
  In addition to ownership controls to prevent monopoly abuse, most
countries have rules on media and cross media ownership to preserve
pluralism and freedom of expression.
  
  In practice, these rules are a patchwork of inconsistency which tend
to distort and fragment the market. They impede companies from taking
advantage of the opportunities offered by the internal market,
especially in multimedia, and could put them in jeopardy vis-a-vis
non-European competitors.
  
  In current circumstances, there is a risk of each Member State
adopting purely national legislation in response to the new problems
and challenges posed by the information society. Urgent attention has
to be given to the question of how we can avoid such an undermining of
the internal market and ensure effective rules which protect pluralism
and competition.
  
  Rules at the European level are going to be crucial, given the
universality of the information society and its inherently transborder
nature. The Union will have to lead the way in heading off deeper
regulatory disparity.  In so doing it will reinforce the legal
security that is vital for the global competitiveness of Europe's
media industry.

The Group believes that urgent attention should be given to the
question of how we can avoid divergent national legislation on media
ownership undermining the internal market. Effective rules must emerge
to protect pluralism and competition.

The role of competition policy
  
  Competition policy is a key element in Union strategy.  It is
especially important for consolidating the single market and for
attracting the private capital necessary for the growth of the trans-
European information infrastructure.
  
  Areas of the information society are beset by intense globalising
pressures.  These affect both European and non-European companies
operating inside the Union. If appropriate, the notion of a global,
rather than a Union-wide, market should now be used in assessing
European competition issues such as market power, joint ventures and
alliances.

Competition Policy is a key element in Europe's strategy. The Group
recommends that the application of competition rules should reflect
the reality of the newly emerging global markets and the speed of
change in the environment.
  
  The aim should not be to freeze any set of regulations, but rather
to establish procedures and policies through which the exploding
dynamism of the sector can be translated into greater opportunities
for wealth and job creation.
  
  Like other commercial players, companies involved in the supply of
technologies and services must be in a position to adapt their
strategies and to forge alliances to enable them to contribute to, and
to benefit from, overall growth in the sector in the framework of
competition policy


Technology
  
  The technological base in Europe today is sufficient to launch the
applications proposed in this reports without delay. They must focus
on realistic systems on a sufficient scale to explore the value of the
services offered to the user, and to evaluate the economic feasibility
of the new information systems.
  
  However, new technologies do still have to be developed for their
full-scale introduction following these demonstrations. In particular,
the usability and cost-effectiveness of the systems must be improved,
and the consequences of mass use further investigated.
  
  The research programmes of the Union and of Member States, in
particular the Fourth Framework Programme, should be implemented in
such a way as to take into account market requirements. Technical
targets and the timing of projects must be defined with appropriate
user involvement.

Chapter 4

The building blocks of the information society
  
  Communications systems combined with advanced information
technologies are keys to the information society. The constraints of
time and distance have been removed by  networks (e.g. telephone,
satellites, cables) which carry the information, basic services (e.g.
electronic mail, interactive video) which allow people to use the
networks and applications (e.g. distance learning, teleworking) which
offer dedicated solutions for user groups.
  
The opportunity for the Union - strengthening its 
existing networks and accelerating the creation 
of new ones

 ISDN: a first step
  
  The traditional telephone network is changing its character. Having
been built as a universal carrier for voice, it now has to meet the
communication requirements of a modern economy going far beyond simple
telephone calls.
  
  One important development is the Integrated Service Digital Network
ISDN.  This offers the opportunity to send not only voice, but also
data and even moving images through telephone lines.
  
  ISDN is particularly suited for the communications needs of small
and medium sized enterprises.  It permits, for example, direct PC to
PC communication, for instant, low-cost transmission of documents. 
Teleworking using ISDN services can be attractive to a wide range of
businesses. ISDN is also an ideal support for distance learning.
  
  EURO-ISDN, based on common standards, started at the end of 1993. 
 A number of European countries have a leading position which should
be exploited.

The Group recommends priority extension of the availability of EURO-
ISDN, in line with current Commission proposals, and reductions in
tariffs to foster the market.

     Broadband: the path to multimedia
  
  ISDN is only the first step.  New multimedia services, for instance
high quality video communications, require even more performance. ISDN
is showing the way, and the next technological wave aims for the
multimedia-world.  This is integrated broadband communications,
providing an opportunity to combine all media in a flexible way. The
lead technology to implement this is called Asynchronous Transfer Mode
(ATM).
  
  European industry and telecoms operators are at the forefront of
these technological developments and should reap the benefits.
  
  Europe needs to develop an ATM broadband infrastructure as the
backbone of the information society.  Multimedia services offered
through these networks will support the work and leisure activities of
all our citizens.
  
  In many European countries, highly developed broadband distribution
already exists in the form of cable and satellite networks, or it is
being deployed. Application of currently available sophisticated
digital techniques, such as picture compression and digital signal
transmission, will easily enable these networks to fulfill mainstream
demands for interactive individual information and leisure uses.
  
  The present situation is mainly characterised by national and
regional initiatives. The first trials of transnational networks have
taken place only recently.
  
The Group recommends that the Council supports the implementation of
the European broadband infrastructure and secure its interconnectivity
with the whole of European telecom, cable television and satellite
networks.

A European Broadband Steering Committee involving all relevant actors
should be set up in order to develop a common vision and to monitor
and facilitate the realisation of the overall concept through, in 
particular, demonstrations and, choice and definition of standards.

     Mobile communication:  a growing field 
  
  Mobile communication is growing at breathtaking speed. The number of
mobile telephone subscribers has doubled over the past three years to
8 million.  At current growth rates of 30-40%, the Union will soon
have 40 million users.
  
 Europe is becoming an important leader in mobile communications
through adoption around the world of  its standards for digital
communications. In particular, GSM is an excellent demonstration of
how a common Europe-wide public/private initiative can be successfully
transformed into a market driven, job creating operation.
  
  In Germany, the country where GSM is currently having most success,
about 30,000 new jobs have been created. On similar assumptions,
Europe-wide introduction on the same scale would generate more than
100,000 new jobs.
  
     Satellites: widening the scope of communications
  
  Satellites are mainly used for television broadcasting, Earth
observation and telecommunications. The crucial advantage of
satellites is their wide geographical coverage without the need for
expensive terrestrial networks. Satellites have many advantages for
providing rural and remote areas with advanced communications.
  
  Full exploitation of satellites can only be achieved by a new phase
in the Union's satellite policy. The objective should be to develop
trans-European networks.
  
With regard to mobile and satellite communications, the Group
recommends:

- a reduction in tariffs for mobile communications;    
- promotion of GSM, in Europe and internationally;
- the establishment of a regulatory ramework for satellite 
 communications;
- urging the European satellite industry to develop common
 priority projects and to participate actively in the development of
 worldwide systems.

New basic services are needed
  
  New basic services such as e-mail, file transfer and interactive
multimedia are needed. The necessary technology is available. New
networks are developing, such as ISDN, eliminating the present
limitations of the telephone network.
  
  Two basic elements are needed for such services: unambiguous
standards and critical mass. The attraction of a telecommunications
service depends directly on the number of other compatible users.
Thus, a new service cannot really take off until a certain number of
customers has subscribed to the service. Once this critical mass has
been achieved, growth rates can increase dramatically, as in the case
of INTERNET.
  
  INTERNET is based on a world-wide network of networks that is not
centrally planned.  In fact, nobody owns INTERNET. There are now some
20 million users in more than 100 countries.  The network offers
electronic mail, discussion fora, information exchange and much more.
INTERNET is so big, and growing so fast, that it cannot be ignored. 
Nevertheless, it has flaws, notably serious security problems. Rather
than remaining merely clients, we in Europe should consider following
the evolution of INTERNET closely, playing a more active role in the
development of  interlinkages.

The Group recommends urgent and coherent action at both European and
Member State levels to promote the provision and widespread use of
standard, trans-European basic services, including electronic mail,
file transfer and video services.

The Commission is recommended to initiate the creation of  a _European
Basic Services Forum_ to accelerate the availability of unified
standards for  basic services.
  
  Significant advantages for the whole economy could be realised quite
quickly through extension of Europe-wide compatible basic services.
  
Blazing the trail - ten applications to 
launch the information society
  
  Today technology is in search of applications. At the same time,
societies are searching for solutions to problems based on 
intelligent information.
  
  Tariff reductions will facilitate the creation of new applications
and so overcome the present low rate of capacity utilisation. Voice
lines operate, for instance, an average of 20 minutes in 24 hours,
while some value-added network services are only working at 20% of
capacity.
  
  However, confident as we are of the necessity to liberate market
forces, heightened competition will not by itself produce -or produce
too slowly- the critical mass which has the power to drive investment
in new networks and services.
  
  We can only create a virtuous circle of supply and demand if a
significant number of market testing applications based on information
networks and services can be launched across Europe to create critical
mass.

`We can only create a virtuous circle of supply and demand if a
significant number of market testing applications based on information
networks and services can be launched across Europe to create critical
mass.'
     
          Demonstration Function
  
  Initiatives taking the form of experimental applications are  the
most effective means of addressing the slow take-off of demand and
supply. They have a demonstration function which would help to promote
their wider use; they provide an early test bed for suppliers to fine-
tune applications to customer requirements, and they can stimulate
advanced users, still relatively few in number in Europe as compared
to the US.
  
  It is necessary to involve local, metropolitan and regional
administrations in their development. Cities can have an extremely
important role in generating  early demand and also in promoting an
awareness among their citizens of the advantages of the new services.
In certain cases, local administrations could demonstrate the benefits
by assuming the role of the first mass user.
  
  To be truly effective, such applications need to be launched in real
commercial environments, preferably on a large scale. These
initiatives are not pilot projects in the traditional sense.  The
first objective is to test the value to the user, and the economic
feasibility of the information systems.
  
  As the examples in the following pages demonstrate, it is possible
to identify initiatives which will rapidly develop new applications
and markets, while also impacting positively on the creation of new
jobs and businesses.
  
  The private sector is ready to embark on the initiatives needed.
  
  Priority applications can be divided in two main blocks, according
to  final users:
  
    - the personal home market (interactiv and transaction
      applications related to teleshopping, telebanking, entertainment,
      leisure)
    - business and social applications.
  
  Priority applications should also contribute to a number of macro-
economic objectives:
  
    - strengthening industrial competitive ness and promoting the
      creation of new jobs
    - promoting new forms of work organisation
    - improving quality of life and quality ofthe environment
    - responding to social needs and raising the efficiency and cost-
      effectiveness of public services.

Application One

TELEWORKING

More jobs, new jobs, for a mobile society

  What should be done?  Promote teleworking in homes and satellite
offices  so that commuters no longer need to travel long distances to
work. From there, they can connect electronically to whatever
professional environment they need, irrespective of the system in use.

  
  Who will do it? If the telecom operators make available the required
networks at competitive prices, the private sector  will set up new
service companies to supply teleworking support.  
  
  Who gains? Companies (both large and SMEs) and public
administrations will benefit from productivity gains, increased
flexibility, cost savings. For the general public, pollution levels,
traffic congestion and energy consumption will be reduced.  For
employees, more flexible working arrangements will be particularly
beneficial for all those tied to the home, and for people in remote
locations the narrowing of distances will help cohesion.  
  
  Issues to watch?  Problems arising from decreased opportunities for
social contact and promotion will have to be addressed.  Impact on
labour legislation and social security provision will need to be
assessed.
  
  What target? Create pilot teleworking centres in 20 cities by end
1995 involving at least 20,000 workers. The aim is for 2% of white
collar workers to be teleworkers by 1996; 10 million teleworking jobs
by the year 2000.


Application Two
  
DISTANCE LEARNING

Life long learning for a changing society

  What should be done? Promote distance learning centres providing
courseware, training and tuition services tailored for SMEs, large
companies and public administrations.  Extend advanced distance
learning techniques into schools and colleges.
  
  Who will do it? Given the required network tariffs at competitive
prices, industry will set up new service provider companies to supply
distance learning services for vocational training. European
Commission should support quality standards for programmes and courses
and help create a favourable environment.  Private sector providers
and public authorities will enter the distance education market,
offering networked and CD-I and CD-ROM interactive disk based
programming and content at affordable prices. 
  
  Who gains? Industry (specially SMEs) and public administrations, by
cost reductions and optimisation of the use of scarce training and
education resources. Employees needing to upgrade their skills by
taking advantage of lifelong learning programmes.  People tied to the
home and in remote locations. Students accessing higher quality
teaching.
  
  Issues to Watch?  Need to engage in a major effort to train the
trainers and expand computer literacy among the teaching profession.
  What target? Pilot projects in at least 5 countries by 1995. 
Distance learning in use by 10% of SMEs and public administrations by
1996.  Awareness campaigns among the professional associations and
education authorities. 
  
Application Three

A NETWORK FOR UNIVERSITIES AND RESEARCH CENTRES
Networking Europe's brain power

  What should be done? Development of a trans-European advanced
network (high bandwidth, high definition, carrying interactive
multimedia services) linking universities and research centres across
Europe, with open access to their libraries.
  
  Who will do it ?  Providing broadband networks and high speed lines
are available  at competitive rates, universities and research centres
will set up the networks. Private companies, large and small, could
also link their laboratories with universities and research centres. 
A trans-European public library network can also be envisaged.
  
  Who gains? The productivity of research programmes through broader
team creation leading to synergies between institutions. Society in
general through more efficient diffusion of research findings and
knowledge.
  
  Issues to watch? Giving due consideration to IPR protection as the
accumulated stock of human knowledge becomes more readily accessible. 

  
  What target? Thirty per cent of European universities and research
centres linked through advanced communications networks by 1997.
Extension to other European countries as this becomes technologically
feasible.


Application Four

TELEMATIC SERVICES FOR SMEs
Relaunching a main engine for growth and employment in Europe

  What should be done? Promote the widest possible use of telematic
services (E-mail, file transfer, EDI, video conferencing, distance
learning, etc.) by European SMEs, with links to public authorities,
trade associations, customers and suppliers. Raise the awareness of
added value services, and communications in general, among SMEs.
Increase access to trans-European data networks.
  
  Who will do it ?  If  the necessary ISDN networks are available at
competitive rates, the private sector will provide trans-European
value-added services tailored for SMEs. Local government, Chambers of
Commerce and trades associations linking SMEs will mount programmes
for integrating information networks at the local and regional level,
promoting awareness campaigns for the services available.
  
  Who gains ? SMEs will be able to compete on a more equal basis with
larger companies and captive contractor-supplier relationships will be
weakened. They will be more competitive, will grow faster and create
more jobs.  Relationships with administrations will be simpler and
more productive. The category will gain in public standing and
influence.
  
  What target ?  Access to Trans-European telematic services for SMEs
available by  end 1994-1995.  40% of SMEs (firms with more than 50
employees) using telematic networks by 1996. SME links with
administration networks prioritised.

Application Five

ROAD TRAFFIC MANAGEMENT
Electronic roads for better quality of life
  
  What should be done? Establish telematic solutions on a European
scale for advanced road traffic management systems and other transport
services (driver information, route guidance, fleet management, road
pricing, etc.).
  
  Who will do it? European, national and regional administrations,
user groups and traffic operators will create a Steering Committee and
define a common open system architecture for advanced telematic
services with common user interfaces.
  
  Who gains? Drivers, local communities (especially in heavily
congested areas) and industry will benefit from reduction in traffic,
increased road safety, lower environmental costs, energy and time
saving.
  
  What target?  Implementation of telematic systems for road traffic
management in 10 metropolitan areas and 2,000 km of motorway by 1996. 
30 metropolitan areas and the trans-European motorway network by the
year 2000. 


Application Six

AIR TRAFFIC CONTROL
An electronic airway for Europe

  What should be done? Create a European Air Traffic Communication
System providing ground-ground connections between  all European Air
Traffic control centres (ATC) and air-ground connections between
aeroplanes, ATC-centres across the European Union and the European
Civil Aviation Conference, with the aim of achieving a unified trans-
European air traffic control system.
  
  Who will do it?  The European Council should promote energetically
the creation of a reduced number of networked European Air Traffic
centres, as defined by EUROCONTROL.
  
  Who gains? The European air transport industry - and its millions of
passengers - will benefit from better air traffic management and
significantly reduced energy consumption.  A safer system, with less
congestion and subsequent reductions in time wasted, noise and fume
pollution. 
  
  Issues to watch?  There is a need to co-ordinate closely with the
defence sector.
  
  What target? Set up a Steering Committee with representatives of
public authorities, civil and military aviation authorities, the air
transport industry and unions by end 1994. Definition of standards for
communication procedures and the exchange of data and voice messages
between ATC-centres as well as between ATC-centres and aeroplanes. 
  A functioning trans-European system before the year 2000.


Application Seven

 HEALTHCARE NETWORKS
Less costly and more effective healthcare systems for Europe's
citizens

  What should be done? Create a direct communication `network of
networks' based on common standards linking general practitioners,
hospitals and social centres on a European scale.
  
  Who will do it? The private sector, insurance companies, medical
associations and Member State healthcare systems, with the European
Union  promoting standards and portable applications. Once telecom
operators make available the required networks at reduced rates, the
private sector will create competitively priced services at a European
level, boosting the productivity and cost-effectiveness of the whole
healthcare sector.
  
  Who gains? Citizens as patients will benefit from a substantial
improvement in healthcare (improvement in diagnosis through on-line
access to European specialists, on-line reservation of analysis and
hospital services by practitioners extended on European scale,
transplant matching, etc.). Tax payers and public administrations will
benefit from tighter cost control and cost savings in healthcare
spending and a speeding up of reimbursement procedures. 
  
  Issues to watch? Privacy and the confidentiality of medical records
will need to be safeguarded.
  
  What target? Major private sector health care providers linked on a
European scale. First level implementation of networks in Member
States linking general practitioners, specialists and hospitals at a
regional and national level by end 1995.

Application Eight

ELECTRONIC TENDERING
More effective administration at lower cost

  What should be done? Introduction of electronic procedures for
public procurement between public administrations and suppliers in
Europe followed by the creation of a European Electronic Tendering
Network. This programme will function as a strong enabling mechanism 
for attaining critical mass in the telematic services market in
Europe.
  
  Who will do it? European Council and Member States decide to agree
on common standards and to introduce a mandatory commitment to
electronic handling of information, bidding and payments related to
public procurement. Telecom operators and service providers will
enable users to access to the European Electronic Tendering Network.
  
  Who gains? Public Administrations will benefit from cost savings in
replacing paper handling with electronic handling and from the more
competitive environment between suppliers drawn from the wider
internal market.  Small and medium sized enterprises will benefit from
participating in trans-European public procurement and from the
diffusion of telematic services. 
  
  Issues to watch?  Data security, the need to ensure open access
particularly for SMEs, to avoid electronic procurement developing into
a hidden form of protectionism. Take proper account of similar
programmes developed in third countries, particularly the US (CALS).
  
  What target? A critical mass of 10% of awarding authorities using
electronic procedures for their procurement needs could be attained in
the next two to three years.
  

Application Nine

TRANS-EUROPEAN PUBLIC ADMINISTRATION NETWORK
Better government, cheaper government
  
  What should be done?  Interconnected networks between Public
Administrations networks in Europe, aiming at providing an effective
and less expensive (replacement of paper by electronic means)
information interchange.   Subsequently extended to link public
administrations and European citizens.
  
  Who will do it? European Union and Member States should strengthen
and speed up the implementation of the programme for Interchange of
Data between Administrations (IDA).  The private sector will increase
its co-operation with the European Union and Member States in defining
technical solutions for the provision of interoperable services and
interconnectable networks, while supporting national and local
authorities in the testing and implementation of  networks and
services for citizens.
  
  Who gains? The unification process for the single market, with
general benefits in lower costs and better relations between public
administrations and European citizens.  
  
  What target? Implementation of  interconnected networks allowing
interchange in the tax, customs and excise, statistical, social
security, health care domains, etc.,  by 1995-96. 


Application Ten

CITY INFORMATION HIGHWAYS
Bringing the information society into the home
  
  What should be done? Set up networks providing households with a
network access system and the means of using on-line multimedia and
entertainment services on a local, regional, and national and
international basis. 
  
  Who will do it?  Groups of content and service providers
(broadcasters, publishers), network operators (telecoms organisations,
cable), system suppliers/integrators (e.g. consumer electronic
industry).  Local and regional authorities, citizens groups, chambers
of commerce and industry, will have very important roles to play.
  
  Who gains?  Consumers will enjoy early experience of complex new
services, particulary multimedia services, and will be able to express
their preferences in the fields of entertainment (video on demand),
transaction-oriented services (banking, home shopping etc.) as well 
as gaining access to information services and teleworking or
telelearning.
  Public authorities will gain experience with issues such as privacy,
IPR protection, standardisation which will be helpful in defining a
single legal and regulatory environment.
  Private sector participants will gain early hands-on experience of
consumer preferences for programmes, software and services. User
interfaces can be tested and improved in practice.
  
  What target?  Install and operate in up to five European cities with
up to 40,000 households per city by 1997.


Chapter 5

Financing the information society - 
a task for the private sector
  
  It is neither possible nor necessary at this stage to be precise
about the amount of investment that will be generated by the
development of the information infrastructure and related services and
applications. Analyses made of the US market remain highly
questionable, although there is no doubt that the total investment
required over the next 5 to 10 years will be considerable.
  The Group believes the creation of the information society in Europe
should be entrusted to the private sector and to market forces.

The Group believes the creation of the information society in Europe
should be entrusted to the private sector and to market forces.
  
  Private capital will be available to fund new telecoms services and
infrastructures providing that the different elements of this Report's
Action Plan are implemented so that:
  
  - market liberalisation is fast and credible
  - rules for interoperability and reciprocal access are set
  - tariffs are adjusted
  - the regulatory framework is established
  
  There will be no need for public subsidies, because sufficient
confidence will have been established to attract the required
investment from private sources.
  
  Ultimately, it is market growth that is perceived as the real
guarantee for private investors, rendering subsidies and monopolies
superfluous.
  
  Public investment will assume a role, but not by any increase in the
general level of public spending - rather by a refocusing of existing
expenditure. Indeed, some of the investment that public authorities
will have to undertake to develop applications in areas of their own
responsibility will generate productivity gains and an improvement in
the quality of services that should, if properly handled, lead to
savings. 
  
  In addition to some refocusing of expenditure on R&D, modest amounts
of public money may also be useful to support awareness campaigns
mainly directed at small and medium sized businesses and individual
consumers.

The Group recommends refocusing existing public funding more
specifically to target the requirements of the information society. 
At the Union level, this may require some reorientation of current
allocations under such headings as the Fourth Framework Programme for
research and development and the Structural Funds.

  The same is true for expenditure at the European Union which can
achieve important results by a better focusing of existing resources,
including finance available under both the Fourth Framework Programme
funding R&D, and under the Structural Funds.
  
  The Commission has also proposed limited support for some of the
services and applications included in the Group's Action Plan from
funds linked to the promotion of trans-European networks. These
proposals deserve support.


Chapter 6

Follow-up
 
  With this Report the Group has completed its mandate and provided
recommendations for action. Our recommendations should be regarded as
a coherent whole, the full benefits of which can only be reaped if
action is taken in all areas.
 
Given the urgency and importance of the tasks ahead, the Group
believes that at Union level there must be one Council capable of
dealing with the full range of issues associated with the information
society.  With this in mind, each Member States may wish to nominate
a single minister to represent it in a Council of Ministers dedicated
to the information society. The Commission should act similarly.

The Group calls for the establishment by the Commission of a Board
composed of eminent figures from all sectors concerned, including the
social partners, to work on the framework for implementing the
information society and to promote public awareness of its
opportunities and challenges. This Board should report at regular
intervals to the institutions of the Union on progress made on the
implementation of the recommendations contained in this report.


An Action Plan - summary of recommendations

Regulatory Framework

Evolving the regulatory domain

Member States should accelerate the ongoing process of liberalisation
of the Telecom sector by :

- opening up to competition infrastructures and services still in  the
monopoly area
- removing non-commercial political burdens and budgetary constraints
imposed on telecommunications operators
- setting clear timetables and deadlines for the implementation  of
practical measures to achieve these goals.

An authority should be established at European level whose terms of
reference will require prompt attention.

Interconnection and Interoperability

Interconnection of networks and interoperability of services and
applications should be primary Union objectives. The European
standardisation process should be reviewed in order to increase its
speed and responsiveness to markets.

Tariffs

As a matter of urgency the international, long distance and leased
line tariffs should be adjusted to bring these down into line with
rates practised in other advanced industrialised regions. The
adjustment should be accompanied by the fair sharing of public service
obligations among operators.

Critical Mass

Public awareness should be promoted. Particular attention should be
paid to the small and medium-sized business sector, public
administrations and the younger generation.

Worldwide Dimension

The openness of the European market should find its counterpart in
markets and networks of other regions of the world. It is of paramount
importance for Europe that adequate steps should be taken to guarantee
equal access.

Completing the agenda

The Information Society is global.
Union action should aim to establish a common and agreed regulatory
framework for the protection of intellectual property rights, privacy
and security of information in Europe and, where appropriate,
internationally.

IPRs

Intellectual property protection must rise to the new challenges of
globalisation and multimedia, and must continue to have a high
priority at both European and international levels.


Privacy

Without the legal security of a Union-wide approach, lack of consumer
confidence will certainly undermine the rapid development of the
information society. Given the importance and sensitivity of the
privacy issue, a fast decision from Member States is required on the
Commission's proposed Directive setting out general principles of data
protection.

Electronic protection, legal protection and security 

Work at the European level on electronic and legal protection as well
as security should be accelerated.

Media ownership

Urgent attention should be given to the question of how we can avoid
divergent national legislation on media ownership undermining the
internal market. Effective rules must emerge to protect pluralism and
competition.

Competition

Competition is a key element in Europe_s strategy. The application of
competition rules should reflect the reality of the newly emerging
global markets and the speed of change in the environment.


Building blocks

Networks

Priority has to be given to the extension of the availability of EURO-
ISDN, in line with current Commission proposals, and reductions in
tariffs to foster the market.

The Council should support the implementation of the European
Broadband Infrastructure and secure its interconnectivity with the
whole of European telecom, cable television and satellite networks.
A European Broadband Steering Committee involving all relevant actors
should be set up in order to develop a common vision and to monitor
and facilitate the realisation of the overall concept through, in
particular, demonstrations, and choice and definition of standards.

With regard to mobile and satellite communications :
- tariffs for mobile communications should be reduced
- GSM should be promoted in Europe and internationally
- a  regulatory framework for satellite communications should be
established
- the European satellite industry should be urged to develop common 
priority projects and to participate actively in the development of
world-wide systems.

Basic services

The provision and widespread use of standard trans-European basic
services, including electronic mail, file transfer, video services,
should be promoted by urgent and coherent action at both the European
and Member State levels.

The Commission should initiate the creation of a European Basic
Services Forum to accelerate the availability of unified standards for
basic services.

Applications

Initiatives in the application domain are the most effective means of
addressing the slow take-off of demand and supply. They have a
demonstration function which would help promoting their use. The Group
has identified the following initiatives :

- Teleworking
- Distance learning
- University and research networks
- Telematic services for SMEs
- Road traffic management
- Air traffic control
- Health care networks
- Electronic tendering
- Trans-European public administration network
- City information highways.

Financing

The creation of the information society should be entrusted to the
private sector and to the market forces.

The existing public funding should be refocused more specifically to
target the requirements of the information society. At the Union
level, this may require some reorientation of current allocations
under such headings as the Fourth Framework Programme for research and
development and the Structural Funds.

Follow-up

Given the urgency and importance of the tasks ahead, there must be, at
Union level, one Council capable of dealing with the full range of
issues associated with the information society. With this in mind,
each Member State may wish to nominate a single minister to represent
it in a Council of Ministers dedicated to the information society. The
Commission should act similarly.

A Board composed of eminent figures from all sectors concerned,
including the social partners, should be established by the Commission
to work on the framework for implementing the information society and
to promote public awareness of its opportunities and challenges. This
Board should report at regular intervals to the institutions of the
Union on progress made on the implementation of the recommendations
contained in this Report.

 


